Multi-Banking: from the concept to a next reality

Current Situation in Liquidity Management for many multinationals and their subs

A. Diversity of bank processes• Different ebanking systems

• Different security protocols

B. Limited transparency• Problematic liquidity allocation

• Data access limitations

C. Trapped cash• Liquidity is spread over group entities

• Relocation difficulties

Managing multi bank environment is challenging task

Main Objectives

1. Establish secure and transparent CMS

2. Free trapped cash

3. Increase banking efficiency

Possible SolutionsNew: Multi-Bank Cash Pooling

(multi-bank cash concentration) Traditional: Single-Bank Cash Pooling

(one-bank cash concentration)

Only single bank accounts efficiently managed :• cash concentration• single ebanking only oversight,

reporting, initiation transfers for single bank accounts.

Solution does not cover all bank accounts Cash concentration limited to cash pooling bank only Various ebanking systems stay in use Differing bank reportings do not combine Other banks can may be included via SWIFT solutions

Single-Bank Cash Pooling

Multi-Bank Cash Pooling

Capture all banks in one cash pooling system

Plug & Play: fast plug in and plug out of banks

Overnight change capability concentration accounts

Concentration accounts can be with any other bank account

Single-Bank- and Multi-Bank Cash PoolingSystem Comparison

Item Single-Bank Multi-Bank

Cash concentration Limited *) Optimal

ReportingTransparency

VariousLimited

HarmonisedUnlimited

SWIFT-Network required Yes No

Implementation duration 9 – 12 months 5 – 7 months

Change: - Bank structure- Cash pooling bBank

Big effortBig effort

FlexibleFlexible

eBanking operationsManual cash pool efforts

VariousNone

HarmonisedDaily sweeps initiation

*) Inclusion other bank accounts in single bank cash pool require SWIFT-Network connections & sweeps

Single-Bank Multi-Bank

Single-Bank- and Multi-Bank Cash PoolingStrict Cost Comparison

Item One-Off Monthly One-Off Monthly

System- eBanking, cash pooling, TMS €23.3K €6.3K €61.3K €7.5K

Reporting (SWIFT-network) €55.0K €8.6K

SWIFT-Network sweeps(sweep other banks balances with

cash pool bank)

€3.5K

Total €78.3K €18.4K €61.3K €7.5K

Extending single-bank cash pool via SWIFT-network generates significant costs

Single-Bank- and Multi-Bank Cash Pooling

Conclusions

Any suggested (Single-Bank or Multi-Bank) solution significantly improves Efficiency of cash management

Transparency of group’s movements/transactions/balances

Same One-Off costs (Single-Bank or Multi-Bank) = More functionality of Multi-BankLower operational costs

SWIFT-independence

Flexibility adjustment banking arrangements

Only Multi-Bank Cash Pooling system provides enough flexibility to be a Backup Plan

Appendix

Multi-Banking/Multi-Bank Cash PoolingeBanking and Treasury Technology

Treasury Management System, including multibank cash pooling functionalitywww.treasuryservices.be

Multi-bank electronic banking systemswww.omikron.de

Multi-bank electronic banking systemswww.tis.biz

Back-Up Plan?

Implementing Multi-Bank eBankingSample Project Scheme

2015

Month: June July August September October November

Week: 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44

Group 1: Regional BanksCitibank S C T IP

BNP Paribas S C T IP

Bank of China S C T IP

Deutsche Bank S C T IP

JP Morgan Chase Bank S D D D D D D D D C T IP

ING Bank S C T IP

Raiffeisen Bank S C T IP

Group 2: Local BanksBosznia and Herzegovina, Raiffeisen Bank S C T IP

Bangladesh, Sonaly Bank S D D D D D D D D C T IP

India, ICICI Bank S D D D D D D D D C T IP

Kazakhstan, Kazkommertsbank S D D D D D D D D C T IP

Vietnam, Pvcombank S D D D D D D D D C T IP

Cyprus, RCB Bank S D D D D D D D D C T IP

Bolivia, Banco BISA S.A. S D D D D D D D D C T IP

Brazil, Itaú Unibanco S.A. S D D D D D D D D C T IP

Venezuela, BBVA Banco Provincial (BBVA Group) S D D D D D D D D C T IP

Algeria, Societe Generale Algerie S D D D D D D D D C T IP

Kyrgyzstan, Promstroybank S D D D D D D D D C T IP

Libya, Gumhouria Bank S D D D D D D D D C T IP

Nigeria, Fidelity Bank Nigeria S D D D D D D D D

Uzbekistan, JSC Bank "Pahta Bank" S D D D D D D D D

Tajikistan, Bank Eskhata S D D D D D D D D

Russia, Sberbank S D D D D D D D D

Phase per bank

S Scope

D Develop

C Configurate

T Testing

IP In Productions

Duration time depending on (A) planning/project management, (B) bank´s cooperation/availability